A firm with a 14 wacc is evaluating two projects for this

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A Firm with a 14% WACC is evaluating two projects for this year's capital budget. After tax cash flows, including depreciation are as follows;

Project A; -6,000 , 2,000, 2,000, 2,000, 2,000, 2,000

Project B; -18,000, 5,600, 5,600, 5,600,5,600, 5,600

1. Calculate NPV, IRR, MIRR, payback and discounted paybac for each project.

2. Assuming the projects are independent which one would you recommend?

3. If the projcet are mutually exclusive which would you recommend?

4. Notice that the projects have the same cash flow timing pattern. Why is there a conflict between NPV and IRR?

Reference no: EM13616687

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